A Simple 6-Step Process to Starting a Small Business
A successful business venture doesn’t grow overnight.
It takes months and years of hard work to morph into your dream goal. Starting a business begins with a simple thought and when we pursue this thought and make it a reality — a business is born.
Let’s understand the hardships and the first baby steps to take before you start your own small business.
In the later sections, there will be a 6-step guide to kickstarting your own business in the most effortless way possible.
THINGS TO KNOW BEFORE SETTING UP A BUSINESS
Focus on your customers and employees
A business can only flourish if your customers have a demand for your products. Without demand, your supply will soon lead to losses.
Hence, it’s necessary to understand and develop a product that the people need.
Spend time researching your local markets to understand what services or products people need the most and ones that are in short supply.
Don’t worry about the competition during the initial phase, with good service and marketing campaigns, you can overtake even well-established competitors. Another important aspect is paying attention to your employees.
A successful company is established with loyal workers, without whom youend up hiring all year long.
Spend a decent budget on training programs and implementing flexible work-life balance.
Ensure your employees are happy that they don’t need to switch companies over time.
The Business Name
One of the most important things in any business is its name. Consider asking yourself these questions
Is the business name easy to remember?
Is it one word or two words long?
Your business name will merge with the identity of your brand and will forever be spoken by your consumers.
So, ensure you spend a good amount of time brainstorming your business name so you don’t have to change it ever.
You will need to immediately register the business name for a license as well as a domain name for an online business venture. Identity is a crucial aspect of your business — prospective customers will come to know of your products through your brand name.
For example, — Apple was a fruit prior to the founding of the tech company, today everyone understands the value and goals that the company aims to fulfill.
Save Money During the Early Phase
Running a business requires you to have sufficient savings to ensure the cash flow and the demands of the company are met.
It’s necessary for business owners to save every penny during their initial phase to enjoy a successful launch. Understand that to run the business operations you need funds that you can access.
Are you going to take a loan on your funds or do you already have a sizeable investment set up for your business?
If you intend to take a loan, you need to be good with the banks or loan lenders, you need to prove to them that your business is a great investment and that you’re good for paying them back with interest.
Consider coming up with a 1 or 2-year plan before you overshoot your business plan for 5-years.
The interest can eventually add up and you can’t commit to a business with the stress of a big loan.
Hence, it’s necessary to save up during your initial phase.
Managing Cash Flows
Knowing when to cut costs and when to employ important personnel is the responsibility of the business owner. The business owner is responsible to manage the cash flow.
Remember you need to have a roof over your head and have your own personal bills to pay, there is also the matter of having long-term savings to secure your retirement.
Don’t just blindly invest all profits back into the company, investing more doesn’t necessarily grow your company.
You need to have a long-term plan or gather other investors to invest in your goal.
Many companies are ready to invest if you prove to them why your company is a safe bet in the coming years.
Always remember the golden rule! — have savings to fall back on when starting a business.
6 SIMPLE STEPS TO SETTING UP A SMALL BUSINESS
1. Write Down a Full Business Plan
Research is the most important step in setting up a business.
Do you really have a million-dollar idea or are you contemplating one?
Ideas conjured up during your planning stage aren’t necessarily going to generate profits in reality. To get an understanding of your business, ask yourself a few questions —
Who are my audience?
Are there similar companies that are offering the products in the market?
How can I beat the competition out?
What niche does my business fit under?
Questions that you ask yourself will help you realize where the flaw exists and how to confront it. Ask questions on self-help sites such as Quora, Reddit, and WikiAnswers to get answers from leading experts.
Conducting market-research and considering factors for your ideal consumer such as — gender, age, demographics, etc. will help in identifying your audience.
Once you’ve got the type of audience you want to sell to, preparations for setting up your business begins.
Every bit of knowledge counts when starting a business, a single mistake costs you valuable time. Time that you can’t get back.
Hence, it’s best to start off on the right foot.
2. Finalize Budget and Secure Finances
Every company requires an investment to start operations.
These investments cover the cost of infrastructure, employee wages, utility bills, production, transportation, warehousing, etc.
Even if your business requires less investment during the initial phase, it’s necessary to have access to funds during an expansion or to acquire equipment.
Funding your business can be done in a number of ways —
Crowdfunding is a popular way to increase your funds.
This finance option requires you to present an idea on a crowdfunding website and if your idea is received well by an audience, they can choose to fund your project.
Crowdfunding has several layers of funding such as Equity funding, marketplace lending, and donation-based funding.
When you absolutely need to launch your business immediately and can’t wait for allocating funds, a loan is a good way to secure funding.
To apply for a loan, one must demonstrate a credit-free history and the purpose of securing the loan.
Banks are usually the financing partners but there are also private partners that finance business loans.
Angel investors are those investors who must possess a minimum net worth of $1 million and must have an annual income of over $200,000.
Finding an angel investor is like finding a pin in a haystack for the average small business owner.
Although it isn’t impossible, through effective networking one can find an angel investor that cares enough about your project to provide you the much-needed funds.
3. Setup a Website
A business without a website is like drivinga car with three wheels — you won’t get too far without crashing.
In this digital age, a company must have its own website to demonstrate credibility and to increase its consumer count.
Every top company has its own professional website that showcases information about the company and its employees. Companies even provide their goals and values and also offer career placements through their websites for recruitment.
Remember to choose a domain name that is similar to your business.
If the domain name is taken, it’s necessary to contact the individual or company that has bought your domain name or choose the next best one.
To acquire a domain name, simply head over to either GoDaddy or 1&1 and sign up for one.
Next, visit Bluehost or HostGator, for a premium hosting platform. The investment required to set up an online site is considered peanuts in comparison to the benefits you receive.
Next, you need a content management system to run your website and themes, the most user-friendly platform is WordPress.
Finally, all you need is to familiarize yourself with WordPress themes and plugins and your online website is set. From here, constantly update your business website with the latest news and products so your consumers are updated.
4. Obtain Licenses and an Accounting System
Licenses and permits are required for running a small business according to your country’s laws. For a list of licenses and permits regarding small businesses, click here.
If you don’t know what licenses and permits apply to your business, visit the local municipal offices in your area and ask for more information.
Another important aspect when running a small business is to consider hiring an accountant. An accountant is extremely important as he prepares the annual budget, pricing options, generates invoices, and files your taxes. If you wish, hire an accountant utilizing one of the many freelancing sites such as — Upwork, Fiverr, and Peopleperhour.
- The ability for software to perform budgeting
- Support system for merchant transactions
- Inventory management
- Quality Sales Tracking
- Business Tax Analysis
- Payroll Computing
5. Secure Your Team
Behind every successful company is a team of co-workers that work hard to ensure the goal of the company is achieved.
When hiring employees, don’t just hunt for technical skills, but pay attention to their soft skills analysis as well.
An employee that’s great at communication and is able to perform his job role effectively is a double win for the company.
Employee satisfaction must be entertained in the company, here are some ways to ensure your workers are happy —
- Provide flexible work timings
- Vacation packages
- Referral Rewards
- Celebratory events such as Birthdays and Anniversaries of Employees
- Bonus on Healthcare and Insurance
When you have a loyal set of employees that are passionate to work for the company on their own, your brand will soon take to the skies.
6. Promote Business
A marketing strategy is necessary to get your business the visibility it needs to grow.
There are various marketing plans to consider — digital marketing, sales marketing, advertising, etc.
Before we get into any of these, we need to understand the Unique Selling Proposition (USP) of your product.
Once you determine what your product has that other products in the same category don’t, we need to focus this USP as the main focal point of the marketing strategy.
Here are 3 ways to generate consumers for your business…
Scouring over social media networks and posting related posts to your industry is a great way to get people to talk about your product and brand.
Creating necessary article posts to generate hype or offering a discount coupon for first-time buyers is a great way to create publicity.
Generating leads through email is a popular choice for salesmen and while most end up in spam, a well-created email can entice your clients into checking your product out.
Obtain email addresses by offering free products to your clients in return for their email addresses when they visit your website.
The good old-fashioned way of picking up the phone and explaining your product to your clients.
The lead generation rate is far lower than the above two strategies but it’s necessary to try all available options if you want maximum awareness.
Remember, door-to-door sales marketing is also a great option.
BONUS STEP! VALIDATE YOUR BUSINESS IDEA BEFORE LAUNCHING
Ever heard the phrase — Test the waters before you jump in?
A business is no different than jumping into a pool of cold water.
A soft launch such as launching your brand only in your neighborhood is a good idea.
Approaching strangers to test your product and provide feedback through a survey form is a quick way to receive lots of feedback. This is to understand where the issues of your product lie.
Once you’ve addressed the issues, your product will improve drastically before the actual launch and in this way, you avoid embarrassment from your consumers.
If there was an oversight during the planning stages, this is the time to rectify it.
3 KEY GOALS TO ACHIEVE FOR NEW ENTREPRENEURS AFTER STARTING A BUSINESS
1. Setup a Great Team
As an entrepreneur, your first goal after setting up a business is to ensure a good work team is assembled to run the operations.
Focusing on your employees helps in retaining them for a longer duration and their morale will be boosted if they are happy working for your company, thus, increasing productivity.
A survey conducted by NRBI demonstrates that employees that are satisfied with their jobs tend to stay longer in their job roles.
The survey claims that by providing employees with employee benefits such as — healthcare plans, vacation leave, flexible work timings, family insurance, vehicle allowance, etc. employees tend to think twice before they decide to switch their jobs.
By acquiring a dedicated team, your office culture improves and your employees understand exactly what needs to be done for the company to grow.
Employing newer recruits requires training and periodic reevaluation to check their performance.
Hence, it’s necessary to focus on employee retention to increase the success of your company in the long run.
2. Solve all product issues through customer feedback
Is your product facing logistic issues?
Are there manufacturing issues with acquiring raw materials?
It’s necessary to ensure all product issues are solved within the first week of launch to ensure consumers are attracted to your brand. If even one aspect is lacking, your business tends to take the brunt of the damage.
Your customers are the best way to gain information on how your product is performing in the market. Provide customer satisfaction forms with your product and take this information seriously.
Customers usually know what they want and what needs to change in the product. If a growing consensus from your consumers demand that your product’s pricing is too high, it may be time to lower your product pricing.
Ensure you explain to your customer-service team to forward all customer complaints to your senior level managers.
Don’t ignore your customer complaints or you’ll end up under the bridge not knowing what went wrong when there were plenty of signals from your customers.
3. Figure out your product’s USP
A USP is known as a “Unique Selling Proposition” and it’s what defines the uniqueness of your product from the rest of your competitors.
Without a USP, your product has nothing to lay claim to a competitor’s product that is already well established. Developing a USP for your item is absolutely necessary in order to promote your product better to your audience.
To understand your USP, conduct some serious research and figure out what makes your product tick in the market.
Analyze and pinpoint all the advantages that your product provides and then compare it side-by-side to a competitor’s product.
Once you’ve found issues lacking in your competitor’s product, it’s time to market your product’s uniqueness to your customers.
Ad campaigns and digital marketing strategies must highlight the product’s USP in order for your customers to understand what they get by choosing your product over that of a competitor.
For example — if Jet Airways provided a free meal to its economy class fliers while no other airlines provided free meals, then the USP for Jet Airways would be “the free meal along with your economy class ticket”.
If success is achieved overnight, the world would be full of millionaires and there’s no need to list them on a Forbes article.
Starting a business isn’t an overnight adventure, it takes time to develop and in time, you will certainly see the profits rise.
By covering the bases with the above tips, you’ll surely achieve success by consistently working and making the right changes to cover the flaws of your business.
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